Good afternoon.
Ladies and Gentleman, I am delighted to have the opportunity to speak here today at the American Chamber of Commerce in Australia.
Amcham is the largest chamber of commerce in Australia, an organisation that has been doing a mighty job promoting trade between our two countries for nearly 40 years.
When Amcham was established in 1961, Australia was a different place, different not in the geographical sense, but in the geo‑political sense.
Australia was, in the context of the rest of the world, a long, way away.
For example:
- To reach New York in 1961, It would have taken me, at best, 3 days,
- The quickest, most generally accessible mode of overseas communication of the time, was the telegram.
The population of Australia was a little over 10 million people with an overwhelmingly Anglo Saxon culture. When Australia won the Davis cup in 1961, the crowd sang the national anthem of that time, God Save the Queen.
Now, just under 40 years later we can revisit these statistics:
- I can leave for New York this afternoon, and, with a little help from the dateline, arrive this morning.
- On the plane I can stay in touch with my office via email, phone or fax.
- Australia's population has almost doubled, with around 19 million people now living here. When they get home tonight, over 2.4 million of these Australians will be speaking a language other than English. Furthermore over 800,000 of us are comfortable speaking at least one Asian langauge.
- And by the way, when we win the Davis cup later this year we can sing our own National anthem, Advance Australia Fair.
In this relatively short period of time Australia has broken the shackles of isolation.
With the help of the revolution in technology and communication Australia is no longer a prisoner to distance.
Overseas travel is now within the means of many Australians. A ten‑minute call to the US is about the cost of a loaf of bread. And the Internet has given us access, with the click of a mouse, to the products and services of the world's shopping malls.
All of this within a generation.
We have as a nation reached a unique moment in time. A time when not only can we see and reach the world more easily, but more importantly for our economy, the world can now reach us.
Australia has a fantastic opportunity to enter new, previously inaccessible markets, whilst at the same time, attracting investment to Australia.
One area of this economy where Australia does excel is the financial services sector. This segment has been affected more than most by technology shrinking the relevance of physical location.
And, Ladies and Gentlemen, Australia has a lot to offer.
We are a "can do" country, a country that can convert inventive capacity into commercial benefit and return. We have a stable government, an independent judiciary, and according to the worlds most highly respected economists we have the best performing economy in the developed world.
My job, as Global Financial Services Ambassador, is to tell this story.
Recently I have traveled to Asia, Europe and North America. The purpose of these trips was to meet with industry executives and discuss the latest global trends in banking and finance.WE also explored opportunities for Australia to secure its position as a centre for global financial services in the Asia‑Pacific time zone.
What was clear, was this.
There is major paradigm shift occurring in financial services, which has been fuelled by globalisation and technological innovation.
And technology has provided opportunities for business and capital to come together regardless of either party's flag of origin.
It isalso obvious that the Internet has provided effective channels of communication with existing customers and the chance to market to new ones.
The Government believes Australian financial institutions can be amongst the biggest winners in the "new economy" of post‑industrialism. I believe that we have the credentials to substantiate our ambitions.
I would like to highlight four of the cornerstones that we have built our approach on.
Firstly, Australia's financial markets have developed naturally, providing a secure basis for investor opportunities. The markets are liquid, transparent and well run, and offer a wide range of sophisticated products. Whether it is in equities, bonds, synthetics, or managed funds, trading volumes and exchanges and their trading volumes are of world standard.
For example:
- The Sydney Futures exchange is the largest financial futures exchange in our time zone.
- The Australian Stock exchange is the second largest exchange in the time zone
- And the Australian dollar has now passed the Canadian dollar as the 5th most traded currency in the world after the US$, yen, sterlingand euro.
Australia's significance as a financial market in its own right, and as a global financial centre, has been recognised by our invitation to participate on the Financial Stability Forum established by the G7
Our economy continues to receive fantastic reviews from all over the world, even if these reviews seem to evade some Australian journalists. As noted MIT economist, Paul Krugman said recently, "There aren't enough Australian Economies in the world." And you just need to look at the facts to understand why:
We have:
- The fastest growing economy in the developed world, and
- The lowest levels of national inflation since man walked on the moon.
All of this while 7 of our top 10 trading partners were in recession or depression in the midst of the worst financial crisis our region has ever seen.
In short Australia provides the worlds capital with access to theAsian region without the risks of the region.
Secondly Ladies and Gentlemen, we have a well‑educated workforce.
And as I alluded to earlier, Australian cities are the location for companies requiring a range of time zone language skills.
Australia can cover most of the dialects of the region.
If Citi‑Group require English/Bahasi gold traders, or back office staff who can settle transactions that are made anywhere in the time zone, it is unlikely they will find these types of skill sets in Japan or Hong Kong.
But they are definitely here in Australia.
And our education is of the highest standard. Each year thousands of students travel from all over the region to study at undergraduate and postgraduate levels. The qualifications they achieve are recognised as worlds best.
Our third advantage is our secure business environment offering political stability, a sound and effectively regulated financial sector, and world‑class commercial infrastructure.
Australia has built a world‑class financial sector regulatory regime which provides security and integrity, two ingredients vital to investor confidence.
The International Monetary Fund has hailed recent changes, such as the Wallis reforms, as pathbreaking reforms which put Australia at the forefront of international practice'.
Our regulatory approach has become the blueprint for governments not only in our region but in Europe as well. Howard Davis, the chief UK recognises the Wallis report as the blueprint for the recent UK financial system reforms.
Moreover a recent issue of "The Economist" states that Australia has the best competition policy in the world.
Add to this our substantial reform of companys law and the path breaking initiatives in the Corporate law economic reform program and I can say with absolute certainty that we have the most progressive and far sighted regulatory reform agenda of any developed nation around the world.
And I'll get to tax reform in a moment
Finally, the Australian Government is facing the challenges of the new millennium head on, with resulting benefits for the financial sector. Australia can boast it is better prepared than most for the challenges of 1 January 2000. For example, on Y2K compliance, the Gartner Group continues to rank Australia among the most prepared countries in the world, along with the USA, the UK and Canada. This is a credible achievement and reinforces the importance of a safe harbour in a volatile region.
Because I can tell you not everyone in this region is as prepared as Australia
Of course, we can't talk reform without talking tax.
As you know, the Government has undertaken a total overhaul of Australia's tax system.
While the spearhead of retail tax reform is a broad‑based goods and services tax other initiatives such as huge reductions in personal income tax so that 80 per cent of Australians will pay income tax of no more than 30 per cent add to the package. The abolition of wholesale sales tax, Financial Institutions Duty, ban account debits tax, and stamp duty on marketable securities will change the way we do business. Abolishing financial taxes will save investors an expected $8 billion over the next 6 years.
In addition other less obvious reforms such as the relaxation of Foreign Investment Fund so that US mutual funds will now be welcome to enter the Australian investment market, adding further competition that will benefit Australian consumers.
As I am sure you are aware the Governments current focus is on business taxation. At the end of July, the Government received the report of the Review of Business Taxation, chaired by John Ralph.
The review is an incredibly broad and complex document.
It stands about 2 1/2 feet tall and it covers alot of issues, including policy design, drafting of legislation and the administration of business taxation.
Today I can tell you exclusively that we expect to make an announcement in the near future about Ralph.
What I can say about the report is that its conclusions are consistent with our aim of having one of the world's most competitive tax systems.
The Government is acutely aware of the role of business tax reform in achieving our goal of establishing Australia as a financial centre. We want tax reform that builds enduring relationships with financial institutions that have a long‑term commitment to Australia.
Right now there is an growing trend for global organisations to search for regulatory arbitrage opportunities. That will want to trade in jurisdictions that offer maximum investor certainty and protection at the least cost to business.
They want low risk and high return. Don't we all!!
Except global capital is so mobile that it can afford to be demanding of Governments and markets.
The Government is committed to promoting Australia's financial services in such a way that ensures we participate fully in the benefits from the growth in global financial services.
We have put the building blocks in place to cement Australia's position as a financial centre.
And Ladies and Gentlemen Australia has come a long way since Amcham was set‑up.
I only hope that next time I come to speak to you, not only will Australia be firmly established as a truly global financial centre, but that we may even have our own head of state.
Thank You